Tuesday, May 15, 2007
Free Trade - A Universal Good
The line graph aboves shows the increase in US economic prosperity due to free trade. Free Trade's virtues have been praised for 300 hundred years. By allowing everyone equal access to all markets, as the theory goes, they gurantee the most efficient allocation of resources and the cheapest prices for consumers. So, the question comes - can such a theory work in practice? Western rhetoric says it can, and points to international instituitions such as the World Trade Organisation to promote free trade of goods, and the World Bank to provide credit for development projects. However, so long as the West continues to protect its own industries from the international market, its position is arguably hypocritical.
In my opinion, there are many advantages of free trade. I will now state some of the advantages.
1) Being interlocked though trading relationships decreases the likelihood of war. If one is engaged in a mutually beneficial relationship with other countries, then there is no incentive to jeopardise the relationship through aggression. Thus this promotes peace, which is to all of us, a universal good.
2) Maximum global efficiency, and the cheapest prices, can only be maintained by a tariff free international economy. The more efficiently allocated are the world's resources the less waste there is and the more affordable goods will become for consumers.
3) The growth of the developing world is a universal good, because the improvement in the quality of life of millions of people is clearly a moral imperative. Free trade helps countries by maximising their comparative advantage in free trade circumstances.
4) Lastly, another advantage of free trade is that not only free trade in goods that will benefit the developing world. Developing countries gain ready access to capital in liberalised international financial markets. This gives them the opportunity to finance projects for growth and development.
Therefore, in conclusion, I believe that free trade does have a lot of its advantages and helps to increase the world's economic prosperity. Thus I restate my stand that free trade serves as a universal good.
DONE BY: NUR ATIQAH ISMAI
TA 2D'o6
ECONOMIC EXPERT(:
; i'm lovin' it
